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30th April 2007
So why are you in debt? Is it because you took a student loan to fund your post graduate studies? Could it be due to the fact that you maxed out your credit card and payments are unbearable? Is it a mortgage on your house that is eating into your pocket? Or is that smart car that is becoming unaffordable due to rising interest rates? There are many reasons why people end up in debt, especially bad debt. As with two sides to a coin, there are two sides to debt too. There is good debt and then there is bad debt (I will explain the difference in a later post).
I am pretty sure you have figured out by now that I'll be focusing more on the bad type of debt. Why? Like 80% of the population, that is the type of debt I have had encounters with in my personal finance life. Did you know that on an average day there is about US$60 trillion floating to and fro on the stock markets across the globe? With that much money moving around, why is it that the majority of the people in the world are NOT millionaires? By the way another interesting fact is that 20% of the population are producers while 80% are consumers.
It is the consumer group that wind up in bad debt at one stage or another in their financial lives. It is the 80% that keep spending their money on the goods and stock produced by the 20% hence making the producers wealthier year by year. Ever wonder why the rich seem to grow richer and the poor grow poorer? My answer to that, it is all about financial intelligence. Money is a commodity that we cannot do without. But we need to see it as a commodity then it will not enslave us the way it does. We need to learn to make money work for us and not us working for money. Think about that.
There is one thing that is difficult to do and that is to face your debts head on. Being in bad debt causes stress and it can make you very ill. But ill or not your creditors will not stop hounding you for their money. What do you do? Stop accumulating more debt for a start! No more loans, no more looking for credit from the banks or lenders. Next step, get yourself a diary or notebook to write in. Jot down your current income in one column and in the other column, list your creditors one by one and the amounts of money you owe them.
Remember that debt is a temporary situation provided you DO NOT incur any further bad debt.
"Being broke is temporary, but being poor is permanent" - Rich Dad Poor Dad
Chili Says: Heck that part about debts making you ill is so true!! | 04.30.2007 |
Jeremy Says: It seems like even when one is careful you still end up in debt. It's a disease | 04.30.2007 |
Debbie Says: I was diagnosed with severe depression round about a year ago and at the time I had serious financial problems so I agree with your statement about debt causing depression | 04.30.2007 |
Kyle Says: Money in general is a depressing subject for those of us who don't have it | 05.1.2007 |
Cathrine Says: Never asked myself why I'm in debt. Thanks for the post | 05.3.2007 |
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